LinkedIn Wants to Help You Stay at Your Company

LinkedIn built a business around helping recruiters and job seekers look for opportunities at outside companies. Now it wants to help them to do the opposite.

Reuters

LinkedIn on Thursday said it will start telling people about jobs available at their employers, and that it will help recruiters identify internal candidates looking to potentially switch jobs. Focusing more on internal hiring can save companies millions a year on salary on training, LinkedIn said.

“This completely changes the way LinkedIn jobs work,” Parker Barrile, LinkedIn’s vice president of product, said at a company event in San Francisco. “It’s not only about finding great external talent. It’s now about maintaining the talent within your organizations.”

Unlike other social-media companies that rely almost exclusively on advertising, more than 60% of LinkedIn’s revenue comes from fees paid by recruiters. A little more than a quarter of the company’s revenue comes from advertising.

One way LinkedIn gets companies to pay for its recruiting tools is by convincing them they’ll save on headhunter fees. The new retention push takes that further by helping companies sidestep outside recruiting in the first place.

LinkedIn said the average 10,000-employee company could save $7.5 million a year by reducing what it calls “preventable” turnover by 1%. Raises for promotions tend to be smaller than hiring an outsider, and hiring internally can mean less money and time spent on training. LinkedIn said employees who find better jobs within their company are more likely to stay, even if there’s more money to be made elsewhere.

Managers, though, are often reluctant to hire internally out of fear of being seen as poaching from other departments. “You have a lot of money companies are spending on something that’s preventable,” Barrile said.

There are challenges, though. Quitting to go work for another company is among the most effective ways for someone to get a raise. In the U.S., the percentage of people who voluntarily left their jobs rose to 1.8% in November 2013 from a low of 1.2% in September 2009, the Labor Department said. While some retired, most quit to hunt for a new job or because they had already found one.

Even so, employees often go work elsewhere without knowing what opportunities were available internally. Barrile cited a LinkedIn survey that showed 42% of people who took a job at a different company said they would have stayed if there had been a relevant position available.

“People quit their job, not their company,” he said.

Employee retention is particularly critical issue in the technology sector, where software engineers and other skilled employees are in high demand. LinkedIn is headquartered in Mountain View, Calif. — the heart of Silicon Valley.

LinkedIn said it will analyze data to determine the types of job switches that occur most often, say from sales to marketing or from New York to London. In addition to pointing out internal openings to employees, LinkedIn will make suggestions to recruiters based on this data.

LinkedIn made two other announcements Thursday. It is revamping an online tool for recruiters that the company says is easier to use. It also launched a new Android app for recruiters to go along with an existing iOS app.